agencies
NEW DELHI, Apr 21: The stock of Mukesh Ambani-led Reliance Industries scaled new lifetime highs during early trade on Thursday as its shares advanced another 2 per cent. Maintaining its overweight stance on RIL stock, global brokerage firm Morgan Stanley has upgraded its target price to Rs 3,253, signaling about a 20 per cent upside in the counter.
Morgan Stanley's is the highest target for the scrip on the Street now, ET NOW suggested.
The foreign brokerage, which sees value creation potential from RIL's global pivot on energy security, said the current valuation implies zero value being assigned to the new energy business and sooner than later the market will start factoring it in the price.
The scrip climbed over 2 per cent to hit a high of Rs 2,776.40, commanding a m-cap just below $250 billion ($246 billion) at rupee ..
The oil-to-telecom conglomerate's market capitalization now makes it the 37th largest company in the world. RIL has raced past global behemoths like PepsiCo, Toyota, Alibaba, Walt Disney, Cisco and Verizon.
Morgan Stanley said energy security is a key issue for policymakers and believes hydrogen will play a major role in the upcoming energy transition of India.
Because of the heightened awareness of energy security in the country, RIL's new energy business is expected to benefit out of that, it said. The company's net asset value could be boosted by 10 per cent due to the new energy business, the brokerage said.
Given the fact that there is a tightness in the refining and gas market, the company's old energy business is expected to benefit and that could be funding half of the capital expenditure required for this energy business over the next ..
Because of this the company's debt is expected to remain range bound, it said.
Earlier on April 13, domestic brokerage firm Motilal Oswal gave a buy rating to Reliance with a target price of Rs 2,880.
"We value the standalone segment at INR795/share, valuing it at 7.5x FY24E EV/EBITDA. We value Jio at 18x FY24E EV/EBITDA, contributing INR944/share. We value Retail at INR1,118/share, valuing the core segment at 37x FY24E EV/EBITDA and non-core at 4x," said the brokerage. |
